Canadian economist Robert Mondale passed away last Sunday at the age of 88. Mundell was awarded the Nobel Prize in Economics in 1999.
He is best known for his work on optimum currency areas. This work was important to the creation of the Eurozone. So Mondale was a staunch proponent of creating a large currency area with fixed exchange rates. An important condition for creating such a zone was that capital and labor must be able to move freely, so that the economic shock in one part of the currency area could easily be absorbed by another. If a crisis in the auto sector breaks out in Detroit, the United States, then devaluation of the Detroit currency is not necessary, but unemployed workers can relocate to other states with many jobs. In this respect, the eurozone does not appear to be the optimum currency area, since Europeans in regions where the economy is struggling are unlikely to move to regions with many jobs.
Mundell was the so-called supply economist, like Milton Friedman, in the terminology. He was also a supporter of tax cuts. Mundell was affiliated with the Universities of Chicago and Columbia University, among others. He has worked as an advisor to the International Monetary Fund, the World Bank, the Federal Reserve, and the European Commission.